Why I Keep Buying This 5.8%-Yielding Dividend Stock and Expect to Buy Even More Shares in the Future

W.P. Carey generates very stable rental income to pay dividends.
The REIT's leases escalate rents at either a fixed rate or one tied to inflation.
Its solid financial profile gives it the flexibility to invest in expanding its portfolio.
10 stocks we like better than W.P. Carey ›
I really want to become financially independent. I don't like the stress of worrying about how I'll make a living if AI eventually takes my job. This desire is driving me to grow my sources of passive income. My goal is to eventually generate enough passive income to cover my basic living expenses. That way, I won't have to fret if my income from working were to disappear.
My foundational strategy is investing in high-quality, high-yielding dividend stocks. One of my core holdings is W.P. Carey (NYSE: WPC). I recently bought more shares of the high-yielding real estate investment trust (REIT), which I expect to continue doing in the future. Here's why I believe W.P. Carey can help me reach financial independence through passive income.
W.P. Carey owns a well-diversified portfolio of high-quality, operationally critical properties across North America and Europe. It primarily invests in single-tenant industrial, warehouse, retail, and other properties secured by long-term net leases with built-in rent escalations. Net leases provide it with stable rental income because tenants pay all property operating costs, including routine maintenance, real estate taxes, and building insurance. Meanwhile, the rental income tends to rise each year as its leases escalate rents. Forty-seven percent of its leases climb at a fixed rate, while 50% are tied to inflation.
The diversified REIT aims to pay out 70% to 75% of its stable cash flow in dividends. That gives it a comfy cushion while allowing it to retain some cash to fund new income-generating real estate investments.
W.P. Carey also has a rock-solid investment-grade balance sheet. It maintains a conservative leverage ratio with a target in the mid-to-high fives range. The ratio came in at 5.8 at the end of the first quarter. Its strong balance sheet gives it the capacity to continue paying dividends and growing its portfolio during more challenging times.
The combination of stable income and financial strength puts W.P. Carey's high-yielding dividend on a sustainable foundation. For context, its 5.8% yield is about four times higher than the S&P 500's sub-1.5% dividend yield.
W.P. Carey has more embedded rent growth than the typical net lease REIT because more of its leases feature escalation clauses that link rates to inflation. That strategy has paid off in more recent years as elevated inflation has driven faster rent growth for W. P. Carey. Its same-store annual base rent rose at a 2.4% annualized pace in the first quarter and has increased by as much as a 4.3% annualized rate in recent years. For perspective, leading net lease REIT Realty Income expects to capture only around 1% annual base rent growth this year because of lower annual fixed rental rate escalations.
New investments are W.P. Carey's other growth driver. It expects to spend between $1 billion and $1.5 billion to add new properties to its portfolio this year. It has already secured nearly $450 million of new investments in the first quarter, including a $136 million, 59-property sale-leaseback transaction with Reddy Ice for industrial and warehouse properties in the United States. It also had about $120 million of development projects scheduled for completion this year and several hundred million dollars of additional deals in advanced stages in the pipeline.
The company plans to internally fund its 2025 investment rate through post-dividend free cash flow, non-core asset sales, and new debt while remaining within its targeted leverage range. W.P. Carey intends to sell between $500 million and $1 billion of properties this year, primarily self-storage properties not currently secured by net leases. It's also selectively selling retail and warehouse properties linked to lower-quality tenants. The REIT can increase its investment rate if market conditions improve by selling stock to fund additional new investments.
Rising rental income and portfolio growth positions W.P. Carey to grow its cash flow per share. That allows the REIT to raise its dividend. It has hiked its payment level every quarter since resetting its dividend following its strategic decision to exit the office sector in late 2023 by selling and spinning off those properties. Before that, W.P. Carey had increased its dividend at least once annually for a quarter century.
W.P. Carey has everything I want in a passive income investment. The REIT's portfolio generates very stable cash flow to support its high-yielding dividend. It also has the financial flexibility to grow its portfolio, which allows it to steadily increase its dividend. That attractive and growing income stream will help me reach my passive income target sooner. It's why I keep buying shares of W.P. Carey and expect to continue adding to my position in the future.
Before you buy stock in W.P. Carey, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and W.P. Carey wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,386!*
Now, it's worth noting Stock Advisor's total average return is 992% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of June 9, 2025
Matt DiLallo has positions in Realty Income and W.P. Carey. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.
Why I Keep Buying This 5.8%-Yielding Dividend Stock and Expect to Buy Even More Shares in the Future was originally published by The Motley Fool

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Yahoo

21 minutes ago

• Yahoo

About Half Of Homeowners Have Regrets About Buying Their Current Home, 'Affordability Issues Rank High On The List Of Regrets'

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. It may be a buyer's market right now, but a survey by Bankrate found that 42% of homeowners have regrets about purchasing their current homes. The most common regret is not being aware of how much maintenance and other hidden costs would amount to. Bankrate's Hidden Costs of Homeownership Study found that the average cost associated with owning a home in the U.S. is $21,400 per year. That cost has risen over the last five years as inflation and interest rates have increased, and the market has gotten more competitive. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Peter Thiel turned $1,700 into $5 billion—now accredited investors are eyeing this software company with similar breakout potential. Learn how you can Other regrets for homeowners include buying too small or too large a home, overpaying, choosing a bad location, having mortgage rates and mortgage payments that are too high, and not thinking that purchasing a home was a good investment. "For most folks, buying a home is the most expensive transaction of their lifetime," Bankrate Senior Economic Analyst Mark Hamrick said. "After the purchase is complete, we find that affordability issues rank high on the list of regrets. While homeownership is still associated with the proverbial American dream, it is prudent to consider and plan for the many ongoing costs of ownership, not just getting over the threshold of the down payment and settlement." Despite these regrets, 70% of those surveyed said they would repurchase their current home if they had to do it all over again. Meanwhile, 17% said they would not repurchase, and 13% were unsure if they'd make the same decision. Trending: , which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum. Additionally, Bankrate found that home ownership is still a major part of the American Dream for many people. Some 82% of adults say that owning a home is a key part of the American Dream, more so than the ability to retire or have a successful career. Gen Xers and Baby Boomers, in particular, feel that home ownership is a marker of success. "Americans consider homeownership to be the cornerstone of the American Dream, more so than anything else," says Bankrate Chief Financial Analyst Greg McBride. "This belief hasn't wavered and has only gotten stronger despite increasing affordability challenges with a record high percentage of Americans, 82%, citing homeownership as part of the American Dream." The primary reason people cite for wanting to own a home but not being able to do so is affordability. "With household budgets already strained from elevated inflation and so many Americans living paycheck to paycheck, it comes as no surprise that aspiring homeowners point to insufficient income, high home prices and being unable to afford the down payment and closing costs as the major obstacles to homeownership," McBride says. Those hidden fees and maintenance costs only add to the problem. Read Next: With Point, you can Maximize saving for your retirement and cut down on taxes: . Image: Shutterstock This article About Half Of Homeowners Have Regrets About Buying Their Current Home, 'Affordability Issues Rank High On The List Of Regrets' originally appeared on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Yahoo

an hour ago

• Yahoo

Pure-Play Quantum in Focus: IONQ, QBTS Shine, RGTI a Wait-and-See

Quantum computing has long promised a leap in processing power beyond classical limits. The spotlight on this niche sector has intensified recently, with NVIDIA's NVDA CEO Jensen Huang declaring that quantum computing is reaching an 'inflection point,' a sharp shift from his earlier stance that practical use was decades away. Meanwhile, International Business Machines IBM unveiled an ambitious roadmap targeting a large-scale, fault-tolerant quantum computer (codenamed Starling) by 2029. Against this backdrop, investors are increasingly exploring pure-play opportunities in the sector. Three publicly listed quantum firms, IonQ IONQ, D-Wave Quantum QBTS and Rigetti Computing RGTI, have emerged with their distinct strategies and progress. Their last-reported first-quarter 2025 earnings reveal how each is advancing on technology, revenues and financial stability. Image Source: Zacks Investment Research Let's delve deeper. One of IonQ's recent milestones is the $22 million sale of 50% compute capacity from its Forte Enterprise system to EPB Chattanooga, marking the industry's first commercial deployment that combines a quantum network and quantum computer. IonQ announced a series of strategic acquisitions to strengthen its technological edge — the $1.1 billion acquisition of Oxford Ionics (noted outside the earnings call) and the planned purchases of Lightsynq and Capella, which are expected to enhance capabilities in photonic interconnects, quantum repeaters and space-based quantum communication. The company also signed MOUs with Toyota Tsusho, Japan's AIST (G-QuAT division), and satellite tech firm Intellian to explore quantum key distribution in space. IonQ was also selected to participate in DARPA's Quantum Benchmarking Initiative, further validating its leadership in advancing measurable quantum performance. This Zacks Rank #2 (Buy) stock is currently trading 27.6% below its 52-week high of $54.74, which offers a potential upside for new buyers. The Zacks Consensus Estimate for IonQ's 2025 earnings implies a 69.9% improvement over 2024. Image Source: Zacks Investment Research D-Wave Quantum, known for its annealing-based quantum systems, delivered strong first-quarter 2025 financial performance and achieved technical milestones. The company's first-quarter revenues were up 509% year over year, driven largely by a system sale to the Julich Supercomputing Center. Adjusted gross margin surged to 93.6%, while net loss narrowed to $5.4 million, the company's lowest since going public. On the technology front, D-Wave claimed quantum supremacy by simulating a magnetic material problem that would take even the world's most powerful classical supercomputer millions of years to solve. Its new Advantage2 system, featuring over 4,400 qubits, a 40% increase in energy scale, and enhanced 20-way qubit connectivity, showcased substantial performance gains. QBTS, a Zacks Rank #2 stock, is currently trading 20.5% below its 52-week high of $19.76. The Zacks Consensus Estimate for D-Wave's 2025 earnings implies a 72% improvement year over year. Image Source: Zacks Investment Research Rigetti Computing is advancing with its gate-based superconducting quantum architecture, prioritizing scalability and error correction. Key wins include selection for DARPA's Quantum Benchmarking Initiative and a $5.48 million AFOSR-led project to advance its ABAA chip fabrication technology. In the United Kingdom, Rigetti secured three Quantum Mission Pilot Awards focused on real-time quantum error correction with partners like Riverlane and NQCC. A research breakthrough, published in Nature Physics, demonstrated optical control of superconducting qubits, potentially easing cryogenic scaling constraints. However, compared to the other two startups, investors are a bit apprehensive about the stock's near-term growth momentum. This is because its first-quarter 2025 revenues declined to $1.5 million from $3.1 million in the year-ago period. Gross margin was 30%, down from 49% in the year-ago period. Despite near-term challenges, RGTI's sustained R&D momentum and strategic backing signal potential for massive growth as the industry matures. This stock is currently trading 47% below its 52-week high of $21.42. The Zacks Consensus Estimate for Rigetti's 2025 earnings implies an 86.1% improvement year over year. Image Source: Zacks Investment Research Given the current momentum and first-quarter performance, IonQ and D-Wave Quantum stand out as the stronger investment options among the three. Both companies have achieved significant technical and financial milestones, including major system sales, strategic partnerships and strong revenue growth. While IonQ is gaining strength through acquisitions, D-Wave is demonstrating quantum supremacy. In contrast, Rigetti, with a Zacks Rank #4 (Sell), is facing revenue declines and margin compression, making it a less favorable choice for near-term investors despite its long-term potential. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report IonQ, Inc. (IONQ) : Free Stock Analysis Report Rigetti Computing, Inc. (RGTI) : Free Stock Analysis Report D-Wave Quantum Inc. (QBTS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤

Yahoo

2 hours ago

• Yahoo

Here's How You Can Earn $100 In Passive Income By Investing In SL Green Realty Stock

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. SL Green Realty Corp. (NYSE:SLG) is a real estate investment trust focused primarily on acquiring, managing and maximizing the value of Manhattan commercial properties. The 52-week range of SL Green Realty stock price was $45.15 to $82.81. SL Green Realty's dividend yield is 4.69%. It paid $3.09 per share in dividends during the last 12 months. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – On April 16, the company announced its Q1 2025 earnings, posting FFO of $1.40, in line with expectations, while revenues of $144.52 million came in below the consensus of $154.69 million, as reported by Benzinga. During the quarter, the company signed 45 office leases in its Manhattan office portfolio totaling 602,105 square feet. Check out this article by Benzinga for eight analysts' insights on SL Green Realty. Trending: This Jeff Bezos-backed startup will allow you to . If you want to make $100 per month — $1,200 annually — from SL Green Realty dividends, your investment value needs to be approximately $25,586, which is around 388 shares at $65.94 each. Understanding the dividend yield calculations: When making an estimate, you need two key variables — the desired annual income ($1,200) and the dividend yield (4.69% in this case). So, $1,200 / 0.0469 = $25,586 to generate an income of $100 per month. You can calculate the dividend yield by dividing the annual dividend payments by the current price of the stock. The dividend yield can change over time. This is the outcome of fluctuating stock prices and dividend payments on a rolling instance, assume a stock that pays $2 as an annual dividend is priced at $50. Its dividend yield would be $2/$50 = 4%. If the stock price rises to $60, the dividend yield drops to 3.33% ($2/$60). A drop in stock price to $40 will have an inverse effect and increase the dividend yield to 5% ($2/$40). In summary, income-focused investors may find SL Green Realty stock an attractive option for making a steady income of $100 per month by owning 388 shares of stock. Read Next: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – , which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum. Image: Shutterstock This article Here's How You Can Earn $100 In Passive Income By Investing In SL Green Realty Stock originally appeared on